Thorn EMI pulls plug on its `beached whale'

Brutal competition on the high street and the drift towards out-of-town shopping claimed a significant victim yesterday when Thorn EMI confirmed it was pulling the plug on Rumbelows, its ill-starred chain of electrical stores.

The shutters will come down on all 285 Rumbelows branches by the end of April. In addition the 36 Fona shops, an experimental concept offering rent-to-own schemes on items such as televisions and videos, will also close, bringing total job losses to 2,900.

Rumbelows has been losing £12m a year and has never made a profit in its 24 years of existence.

Thorn EMI's chairman, Sir Colin Southgate, said: "It's very sad, and all the Rumbelows staff have worked terrifically hard. But we've been testing new ideas for seven years. They haven't worked, so you have to make a decision and get it out of the way."

Sir Colin said the industry was over-supplied and that Rumbelows was only a small player.

Experts said the stores were in the wrong place selling too narrow a range of goods from premises too small for their purpose. Clive Vaughan of retail consultants Verdict Research said: "Rumbelows was not big enough to take on Dixons and was trying to sell both brown goods and white goods in stores not big enough to stock the ranges offered by the out-of-town superstores. It was left like a beached whale."

Rumbelows started life in 1971 when Thorn acquired an Essex and Hertfordshire group of shops called Sidney Rumbelow's. In spite of constant re-structuring, the business always struggled and is estimated to have lost a total of £80m over the last 10 years.

The closure of the chain will cost Thorn EMI a total of £116m, of which £56.7m relates to property and other fixed-asset write-offs. A further £34m will be allocated for redundancies.

The company said it would concentrate its energies in the high street on Radio Rentals and the fledgeling Crazy George chain.

Crazy George stores offer rent-to-own schemes on electrical appliances to so-called cash-constrained customers who have no other access to credit. Five such branches exist (the first two are already making a profit) but Thorn plans a chain of up to 120.

The Labour Party pounced on the Rumbelows closure as an indication of Britain's fragile economic recovery. Ian McCartney, shadow employment minister, described it as "a hammer-blow to any supposed feelgood factor".

The shopworkers' union Usdaw said it had not been consulted about the Rumbelows decision and would seek a meeting with Thorn EMI to try to ensure good severance terms.

Though Thorn EMI's shares slipped 12p to 1,037p, City analysts welcomed the move saying it would take some capacity out of a crowded market. Dixons, which remained committed to the high street, was one group that stood to benefit, they said.

News of the Rumbelows closure came as Thorn EMI announced third-quarter results showing that, even including the dismal Rumbelows performance, group pre-tax profits increased by 25 per cent to £334m on sales up slightly to £3.4bn in the nine months to 31December.

The record label EMI boosted profits by 19 per cent to £252m, and the HMV chain of record stores more than doubled profits to £14m.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003